In recent years, it has become standard practice for crypto projects to scatter airdrops just before token issuance (TGE). Through the temptation of free tokens, project parties hope to accumulate enough hype and user attention before launching. However, the reality is often that projects reach their peak upon launch, with hype and prices quickly sliding down in a short period. Users often sell off their tokens immediately after claiming airdrops, leading to pressure on the token market, cooling community enthusiasm, and the user base that the project has just built collapses.
Although the traffic brought by airdrops is considerable in the short term, it is difficult to truly solidify as community assets or product users. Due to the lack of genuine business scenarios supporting most projects, after airdrops, they often rely on continuous token issuance to maintain user activity, which essentially overdraws future value. Ultimately, most of these tokens and user traffic flow into the arbitrage cycle of 'wool parties', and the resources that truly support project development are wasted instead. The means originally designed to kickstart the ecosystem have instead become a burden that weakens the project’s vitality.
To break out of this vicious cycle, the conclusion is: projects must become 'projects where wool can be taken from pigs'. The benefits to be given to users are truly borne by third parties willing to pay. The saying 'wool comes from pigs' means that the platform provides products or services for free to users, while other market entities foot the bill. In the context of Web3, this means that project parties do not directly profit from users, but instead first provide benefits to users, with other stakeholders paying the bill, creating a win-win for all three: users benefit for free, the project expands its influence, and the paying party gains users, data, or brand exposure.
Implement a three-step method: Build an ecological closed loop
If you are a project party, you might wonder: 'I want others to pay for my users, how can I do that?' I suggest thinking in three steps:
Clarify the core user group: Please specifically define who the most important users for the project at this stage are. Are they experienced traders primarily transacting on your platform? Or are they everyday users of your product? Or perhaps investors holding your tokens? In other words, you need to first answer 'what kind of user behavior counts as success'. Only by identifying the core user group that can truly deliver results can the subsequent strategies avoid deviating from the goal.
Explore unique competitive advantages: Analyze the project's moat and identify advantages that others cannot easily replicate. This could be cutting-edge technological strength (such as robust infrastructure), a large active user community, unique data assets, etc. Ask yourself: 'What unique skills do I have that others do not possess but desperately need?' Only by clarifying your core value can you have the confidence to make others pay.
Find the paying 'pig': Identify partners who need your resources the most and are willing to pay. For example, if an exchange or public chain project has strong liquidity, you can collaborate with new projects where they use tokens or funds to purchase entry opportunities to your platform; if you operate a DApp with a large number of active users, then other projects wanting users may be willing to pay to airdrop or offer discounts through your channels. In short,whoever lacks your advantages is the 'pig' willing to pay..
Through the above three steps, you can discover that 'others provide you with resources to benefit your users' is not a fantasy, but a designable business model. Essentially, you are using your core resources to help partners achieve their goals, and partners invest to benefit your users, forming an ecological closed loop. This allows users to continuously enjoy dividends while also solidifying your ecological stickiness.
Typical case: Binance's liquidity strategy
Taking Binance, the world's largest exchange, as an example, its core advantages are strong liquidity and a vast user base. The target users of Binance primarily include traders and BNB token holders. It proposes to new projects: willing to exchange tokens or funds for liquidity and exposure opportunities. Binance distributes new project tokens for free to users holding BNB or participating in mining through activities like Alpha airdrops. This method helps new projects quickly gain user attention and liquidity, while also providing additional benefits to Binance's loyal users, thus enhancing the stickiness of BNB holders. The Alpha airdrop targets active users who participate in locking, trading, and providing liquidity to distribute new project tokens, achieving a win-win situation of 'users gain dividends, new projects gain exposure'.
By the way, a common question is: 'Why doesn't Binance do airdrops for ordinary spot trading users?' The answer is that the trading volume on the main site is more provided by market makers (MM), and these market makers themselves earn profits from liquidity. Binance needs to retain these core market makers, so it is more willing to keep airdrop benefits for more small and medium retail users, promoting new projects by expanding a broader user base. This approach aligns with the spirit of 'wool comes from pigs': giving retail users free scratches, while those truly paying are the project parties needing liquidity and the market-maintaining market makers.
Another noteworthy case is the social incentive platform Kaito. Its operational mechanism essentially uses user behavior and content participation on social media (primarily Twitter) as 'assets' to attract traffic, and then collaborates with other crypto project parties to distribute these projects' tokens as rewards to content contributors. In this structure, users accumulate points or receive airdrops by 'outputting attention and voice', while those truly paying the incentive costs are the new project parties hoping to increase influence by leveraging social volume before TGE.
On the surface, this is a typical 'wool comes from pigs' business model: users benefit for free, the Kaito platform undertakes the demand, and the project parties pay for the volume. However, this model has evident structural risks in terms of sustainability. Its core reliance is whether Kaito has the ability to occupy the social attention gateway in the long term. If project parties find more efficient or cost-effective customer acquisition methods in the future, the value of Kaito as an 'intermediary' will significantly decline.
Cooperation for mutual benefit: Core value determines the ecological lifeline
Whether it’s a technology-based project or a community-based project, the premise is to always maintain your core competitiveness. Once you lose the unique value that makes others willing to pay, this model will not work. 'Wool' ultimately still relies on 'pigs' seeing value and being willing to pay. If you find it difficult to identify your own advantages, you should consider adjusting your direction or focusing on deepening the areas you are best at.
For project parties, rather than simply throwing money to drive up prices, it is better to think about what resources can be exchanged with others. Find suitable partners and bring external forces into your ecosystem. For example, your strong user community can bring traffic to other new projects, or your unique data resources can assist projects in decision-making. These are all values that others are willing to spend funds or tokens on. Once successful, your users enjoy tangible benefits, you also strengthen ecological stickiness, and partners achieve their goals—everyone is happy.
Investor perspective: More focus on sustainable empowerment
Now that speculation in the crypto market has subsided and investors are more rational, this is a sign of industry maturity. As an industry observer, I believe that projects capable of long-term survival either have breakthroughs on the technological or product level (providing long-term value) or innovate in business models (providing a virtuous cycle). Projects that can achieve both naturally have an advantage.
For investors, next time you encounter a project boasting, first ask if it has the ability to sustain funding from third parties: Can the project truly make 'pigs keep flying'? After all, only those cooperative models that can make 'pigs trade every day and keep sheep from starving' can laugh last in this market.
The idea of 'wool comes from pigs' is not just a slogan, but a feasible strategy for guiding project operations. It requires project parties to clarify their own value, design ecological subsidy mechanisms, and jointly build growth with partners.